Category Archives: USD/INR

Winners make a habit of manufacturing their own positive expectations in advance of the event. – Brian Tracy

Well, we have to agree with above quote. It is said that if you don’t believe in yourself than nobody is here to believe in you, so first you have to believe in You. Time and again we are saying and it is proved that nobody can stay right all the time in the market, even best of best traders are ready to accept their defeat and that is why they are best and winners, but even to prove wrong you have to have view and confidence in your understanding or for that matter in your trade. Yes, there is very thin line between faith, confidence and overconfidence.

Last week, Bears have confidence in their working and they proved it, but fruits of success were available only for that trader who has smartly taken position on Friday only, because there was choice available on Monday, as market opened sharply lower.

To understand and trade wisely let’s take fresh look on the market and see whether we can take something out of it or not?

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In last couple of days USD/INR witnessed good momentum after breaking out from symmetrical triangle formation (not in its purest form). With that prices also moved above its 200-day EMA. Most traders and analyst were waiting for this breakout, because prior to that prices remained in very narrow range.

Now, prices stand near to major swing high of 55.82 made on 26 Nov’12, after which prices remained on subdued note. Breaking out from this level will invite further attention in the pair.

Momentum oscillator RSI (14) is also moving higher on daily time frame, it almost reached closed to overbought territory. I think which is quite obvious after such quick rise. Similarly, on weekly chart RSI reached near to 60-level.

Since from beginning of March’13, pair of USD/INR is trading in a very narrow range of 55 to 54 Rupee, just 1 rupee move in lat one and half month. In such type of scenario it is very difficult to trade. In last week prices broke out from its long triangle formation (it does not qualify for native triangle pattern, but for name sake I am using it) and again prices moved back to test the apex of the triangle.

From Feb onwards prices are trading on support of its major 200-day EMA, but there is no follow up action till date, so gradually it loses its significance, as it happened in USD/CAD last year.

RSI (14) is hovering near 50 level, which is indicative of indecision among market players, where price action is bit choppy.

From above observation, I would advise my readers to stay away from this pair, as long as it is moving within this narrow range. We’ll take fresh view once prices move above this range.

Generally, I get less chance to look at currency charts, but still sometimes I look at it. Let’s begin with Dollar Index, than EUR/USD and lastly USD/INR.

Dollar Index as on 15 Mar’13 – 82.13

On 14 Mar’13 Dollar Index made a high of 83.16 and finally ended 29 days (trading days) long rally (It seems that rally is ended). From 1st Feb’13 onward prices made a bottom of 78.19 and moving on continuing basis, in between easily taken off resistance of its major 200 DEMA. I am saying that this rally is ended because of last two days price action, which has given two big red candles confirming underlying weakness in prices, with that RSI (14) has also confirmed the fact by moving towards 50-line. And also as depicted in attached we can clearly see rising trend line breakout.

Dollar Index as on 15 Mar’13 – 82.13

It seems that prices moved in impulsive structure, so I expect prices to retrace prior move by at least 38.2% or higher, so initial target comes near 81.52 and next 81.00 from current level. Traders can keep stop loss of 82.61.

EUR/USD as on 15 Mar’13 – 1.3074

Similarly EUR/USD shows reversal signal after falling spree from high of 1.3703 by making a bottom of 1.2911 on 14 Mar’13. FIBER stands close to its major 200-DEMA, and also prices broke out from falling trendline as depicted in attached chart.

EUR/USD as on 15 Mar’13 – 1.3074

Traders can take long position above 1.3105 with stop loss of 1.3016. I expect initially prices to test at least 1.3225 and next 1.3300. Subsequently we can easily trail the stop loss and play the ride.

Finally,

USD/INR as on 15 Mar’13 – 54.02

I am starting with weekly chart. As it is clearly visible Head & Shoulder pattern. Few weeks ago one of my friend has drawn out attention on this pattern, with his analysis, but at that point in time I was not convinced to turn extremely bearish on Dollar, but as pattern is progressing I am becoming little skeptical.

USDINR Weekly Chart

Few weeks ago prices gave false breakdown and immediately reversed; but after that again prices struggling to go higher and that is the sign that is alerting me.

USDINR Daily Chart

From daily chart it is evident that prices moving in congestion, not giving clear clues. But I sense that prices will move lower, and will test support of major trendline as depicted in attached chart, and after that we have to take fresh call on USD/INR price movement.

As you can see in attached USD/INR chart, prices are facing resistance near INR 55 level since from last few sessions. This resistance comes from Golden Fibonacci ratio 61.8% of last move from all time high of INR 57.25 made on 22 July, 12 to low of INR 51.50 which was made on 5th Oct, 12. On the downside prices will witness immediate support from its 200 Day Simple Moving Average, which comes at INR 54.30.

USD/INR – 54.75

Prices moving gradually lower, so the momentum is also fading, it suggests some shorting opportunity. At CMP INR 54.75 traders can take short position keeping stop loss above INR 55.10 with an initial target of INR 54.35.